The Hartford, Munich Re Rank High For Climate Risk Response

The Hartford, Munich Re ranked high among insurers responding to climate risks. Find out how others performed.

The Hartford and Munich Re received high praise in a report released Wednesday ranking the nation's 330 largest insurance companies on their response to increasing climate risks.

Last year, insurance regulators in California, Connecticut, Minnesota, New York and Washington required insurers with more than $100 million in premiums to disclose their climate-related risks using a survey developed by the National Association of Insurance Commissioners. The association advises all insurance regulators in the U.S.

The survey drew 330 responses.

Ceres, a nonprofit organization that analyzed the responses, said it found a strong commitment by nine companies and "generally poor responses among the vast majority [of insurers]."

"Despite being on the 'front line' of climate risks, most of the company responses show a profound lack of preparedness in addressing climate-related risks and opportunities," Ceres President Mindy Lubber said in a statement.

Ceres directs the Investor Network on Climate Risk, a network of 110 institutional investors whose assets collectively are $13 trillion. One institutional investor concerned about climate change preparedness is the California State Teachers' Retirement System, which had a portfolio worth $186.4 billion, including more than $4 billion in insurance companies' stock, as of Sept. 30.

"We have an active educator membership that cares a lot about climate change, about environmental risks, and about making sure that we invest our money prudently on their behalf for their pensions, and as we talk about this, this issue particularly raises increasing concerns, I think, for everyone," Jack Ehnes, CEO of the California State Teachers' Retirement System and a former insurance regulator in Colorado, said during a conference call with reporters Wednesday.

"This is not a theoretical issue, it's not an academic issue," Ehnes said. "We're concerned about climate risk and how the companies we invest in respond to it because it's about the investment performance of the portfolio."

The Ceres report ranked various types of insurers, not just those that provide property coverage.

Rankings were assigned in the following categories: climate risk governance, whether the business has climate risk management across the enterprise, climate modeling and analytics, stakeholder engagement, internal greenhouse gas management, and climate risk disclosure and reporting.

Each insurer received an overall grade from one to four and one word describing each level: "leading" for 4, "developing" for 3, "beginning" for 2 and "minimal" for 1.

Of the 330 respondents, 276 were given "minimal" or "beginning" rankings. Health insurers and life-and-annuity companies were particularly weak, according to the report.

"We have a suite of products that help our customers go green, including premium discounts for owners of hybrid vehicles and electric vehicles," The Hartford's vice president of government affairs, Jay Bruns, said in Wednesday's conference call.

"The Hartford has an environmental investment policy statement … when we do make our investments, we do look at them through that lens," Bruns said. "We are actively investing part of our portfolio into things like solar farms and wind farms."

Munich Re America CEO and President Tony Kuczinski said: "We have an investment philosophy. We're actively looking to support green technology in those investments."

"Insurance companies with their deep risk knowledge and extensive data can play a critical role in helping society to adapt to increasingly severe weather on many fronts," Kuczinski said. "These include supporting policies and efforts to reduce greenhouse gas emissions, as well as developing risk transfer solutions for low carbon and energy efficient technologies which enable private sector investments."

The complete list of insurance companies is online at ceres.org. Among companies that either have major operations in Connecticut or that insure many policyholders in the state, the following received the second-best score of 3: Allstate; Berkshire Hathaway, the parent company of GEICO; Liberty Mutual and The Travelers Cos.Travelers posts its carbon disclosure on its website and the company publicly says it responds to risks and opportunities posed by evolving climate and "green" trends.

The following companies received a score of 2: Aetna, Chubb, Cigna, Progressive and State Farm. UnitedHealth Group and WellPoint, parent company of Anthem Blue Cross and Blue Shield in Connecticut, received a score of 1.

Cigna in September released its corporate responsibility report establishing 2017 environmental targets: a 9 percent reduction in greenhouse gas emissions; a 9 percent reduction in energy use; and a 3 percent reduction in water consumption; among other goals.

UnitedHealth Group spokeswoman Maria Gordon Shydlo said the company, "has been recognized as a leader among S&P 500 companies by the environmental nonprofit CDP for its actions to reduce carbon emissions and mitigate the business risks of climate change.

"We recognize that the environment plays an important role in the health of our communities and continue to strive to be good environmental stewards in our day-to-day operations and long-term strategic planning."

Correction: A previous version of this article said The Travelers Cos. scored 2. The company scored 3.